Ferguson and Son's Manufacturing Budget Analysis

The paper will also provide solutions on how to administer the four key processes underlined in the procedures for improving budgetary in the budgetary control. A good budgetary control system has certain specific characteristics. Within it, there are monetary and non-monetary incentives. The behaviors of employees are affected by these incentives. This is why managers are advised to use the activity-based costing system because when this is utilized properly, it can greatly change the results of the budget. The reason as to why there are departments in an organization is to make work easier through the division of labor in such a way that each department performs specific duties. The budgeting control must be able to bring about proper coordination between the different departments because the departments should also be working towards a common goal.

c) Perspectives are Short Cited- This is dangerous for the organization. This is because it puts stress on emp0loyees who are also not motivated to work. The success of any organization depends on the will of the employees to performs. Budgets should also be established for the right period which goes in line with the fiscal year of the organization. Monetary and Non-Monetary incentives The entire company should be educated on a sound budgetary system. This budgetary system is very important because it encourages behaviors that are geared towards achieving goals. Incentives can be negative or positive. Negative incentives are fear related, and it uses fear to motivate people to work hard while positive incentives use rewards. Using an activity-based budgetary system will also help the company to make use of unit cost rather than total cost.

This makes it easy to monitor the number of resources used in producing it. This will influence the prices of particular products (Albright, Winston, Zappe & Broadie, 2015). Each product will, therefore, have a set price based on the number of resources used in producing it. The activity-based system will also help the management of the business to monitor profits against the costs of production. They have to be made to understand that the new system will help in changing their behaviors. The objectives of the company must also be outlined. Just like any other company, this organization has both long term and short-term objectives. All these must be outlined and made clear to all the employees in the organization. This will also help them get along with what the new system is all about.

This is good because the sole purpose of a company being in business is to make profits. This means that they always have to ensure that they have a good stand regarding profitability (Crosson & Needles, 2014). The ROI concept is used to measure the expected returns of a shareholder about the initial amount of capital they invested. This concept also allows the company to tell how well or bad it is doing against other companies or its competitors. It provides a good opportunity for the business to evaluate its position in the industry it operates. M. Cost Management: Accounting and Control. In D. M. Hansen, Cost Management (p. L. , Zappe, C. J. , & Broadie, M. N. J: Wiley. Gil-Lafuente, A. M. Fuzzy logic in financial analysis.